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Sunday, July 28, 2013

What Makes a Good Workplace?

(Analytical Series on understanding how to make the great workplace based on the Gallup Research)

What makes a great workplace?

Is it pay, benefits?

Is it too complex to understand?

Traditional beliefs held that we should manage the workplace from the standpoint that people will always dislike work, and when they are at work, they will always want to be somewhere else. For years, organizations have attempted to measure and understand employee opinions in an attempt to understand great workplaces. Much of the outcome has been discovering what a great workplace is NOT, versus what it IS. Companies have emerged from one consulting project after another with all the "don't do's" and "quick fixes" and have still struggled to observe much sustainable change.

A few years ago, The Gallup Organization decided to initiate a multi-year research project to try and define a great workplace. The first task was to define what "great" was. They decided that while a great workplace should be one where employees are satisfied with their jobs, it could not be considered "great" if it was not producing positive business outcomes. So they studied workplaces with an eye on four key outcome variables: employee retention, customer satisfaction, productivity and profitability. Based on this research, they have made a number of key discoveries.

Discovery #1: There are no great companies. There are only great workgroups.

Gallup has discovered that to truly understand the workplace, you must be closer than the 36,000 feet level. At this level, it is impossible to distinguish the best from the mediocre workgroups. Best practices of productive workplaces can only be observed at the workgroup level. It is easy to understand why companies have focused on mostly situational factors, like pay, parking, discount in the cafeteria, etc. It is easier to influence these factors from an overall company strategy. But these factors do not really make a difference to the best, most productive employees and workgroups. In all of the companies they have studied, there is tremendous range among workgroups. And great workplaces in different companies have a great deal in common.

Discovery # 2: There appear to be 12 dimensions that consistently describe great workgroups.

There appear to be 12 key dimensions of great workplaces. While the 12 dimensions certainly do not explain everything, they consistently correlate with those workgroups that have higher employee retention, higher customer satisfaction, higher productivity, and higher profits. The dimensions do not include pay and benefits. That does not mean that pay and benefits are not important. But it does mean that they do not differentiate great workgroups from the rest.